HTC good times end: company posts first profit drop in two years

HTC has appeared basically out of the blue a couple of years ago and since then has continuously amazed us with some of the best Android devices out there, but in the last quarter of 2011 the strong Android competition finally took its toll. HTC posted its first quarterly profit drop and it comes in the traditionally strong Holiday quarter when companies like Samsung and Apple are expected to deliver record results.

Net income in Q4 2011 slid 25.5 percent to NT$11 billion ($364 million) from NT$14.8 billion in the same period last year. This doesn’t compare well with analysts’ expectations for around NT$13.3 billion in profits. But the consequential drop is even bigger - in Q3 the company’s income stood at the NT$18.7 billion.

HTC shocked investors in November when it cut its Q4 guidance, and its shares tumbled 28% in just two weeks. What’s worse - investors are starting to worry whether HTC has the innovative muscle to get back in shape. Analysts agree that Samsung and Apple have challenged HTC’s business, and it lacked focus in the low and mid-range parts of the market. What do you think are the reasons HTC’s fairy tale is coming to an abrupt end? Let us know in the comments below.

maybe its because they release the new high end phones way too fast, and doesnt focus on the older devices that are just months old, they release faster than any other companies ,look at samsung, only high end phones like galaxy s2 and note came out this year, htc should really slow down the pace, this is from a htc sensation owner, i love my phone with its cool red white color but i m considering samsung for my future phone, will consider apple too if they come out with a big screen phone, small screen just dont fit, the one hand can reach the entire screen is crap , i have normal size hand and i can reach the entire screen of 4.3in with one hand as well ... peace out!

Or maybe it's because HTC hasn't released an actual high end phone for over a year? HTC's been stuck in a world of TFT screens and Qualcomm chipsets while the competition has moved on to AMOLED screens and TI/NVIDIA/Exynos chipsets. Furthermore, HTC's new point of differentiation is audio quality (Beats), and I don't think this is nearly enough to even interest the majority of prospective buyers. In essence, HTC makes thick, laggy, and poorly-screened (for lack of a better phrase) phones, albeit with Beats branding on the back, while Samsung and Motorola are making thin, snappy, and vivid phones.

I actually think the article mentioned the main reason: Too much reliance on top tier phones. Now, do not get me wrong, I understand the greater profits per handset is with the premium devices, so do not think I am saying come off the super-phones and go budget. Pantech is the opposite on this problem, all budget, no success on the premium and they are mediocre in profits and not ever mentioned with the big dawgs, while HTC always is. But, HTC has simply lost the market on basic phones and low end smartphones. Samsung still pumps out plenty in the low end market, and their profits are consistently great. Nokia has been kept afloat by lower tier smartphones sales that require a lot of volume. That whole "too much of anything is not a good thing" cliche seems to apply here. HTC needs to compete in tier two smartphones, basic feature phones, and basic flip phones to some degree. At least two of the three.

Overall, I do not think we need to worry about HTC. They only made 11 billion? How ever will they keep the lights on in the factories .......

11 billion Taiwanese dollars, which translates to only 364 million US dollars. Also, I disagree that HTC's problem is focusing on top-tier phones. Apple's been doing it for years and it's worked for them. I think their problem (as I stated above) is that their top-tier phones are inferior to other companies' top-tier phones. HTC's top phone right now, the Rezound can't hold a candle to the likes of the Galaxy S 2, Galaxy Nexus, and Droid Razr performance-wise or design-wise (although kudos to the 720p display), and the old standby "but Sense is a much better UI" is getting stale too.

And while I agree HTC devices are not as cutting edge like other top tier devices, they still sell well. I just am not seeing those devices as "flops" enough by themselves to explain the nosedives.

By the way, I loved sense- about a year ago. It was easily the best overlay on Android. Now, I think it is so huge it actually bogs down the performance of their devices. I think both Samsung and Motorola have better UI's that compliments Android, not interferes with. So in my opinion they do not even have that advantage anymore. But Sense has the rep of being the best and it looks the nicest.

dont think lack of lower end phone is htc problem,i think main reason is that they release too many top tier phones(htc outdates its own phones within months of release) and the fact that they dont have a ''series'' like samsung.example samsung have the galaxy series where as htc have none...personally maybe i am wrong but i think many people are starting find sense too bloated which impacts the speed,if you compare the 1.5ghz dualcore rezound with the 1.2ghz gs2 and the s2 is way faster and smoother,also the fact that there top tier phones use the ''slowest'' chips might be a reason aswell because i reckon many people who buy these top tier phones most likely know about chip speeds etc...i do think that htc will be back on the rise again in 2012 if they can create a ''brand'' as big as the galaxy series...as we know with apple brand makes a huge difference and samsung seems to have realised that, example when people see my phone they dont say is that android or a samsung,they say is that the galaxy phone.

Nah. The worst case for HTC is a LG, Sony, or maybe even a Pantech gets on a roll and knocks them down a little. HTC still puts out reliable, unique devices that a large group of people go nuts over. While some see the Vivid as clunky and strange, a huge group of my circle thing it is wonderful to look at and love it isn't a thin phone. The Rezound is very popular here in my area. And they have the largest profits from their Windows Phones line of any manufacturer. HTC ain't going anywhere.

It's obviously because they keep releasing too much of a good thing on a monthly basis almost. iPhone is doing the same thing with their non changing UI, but they only do so once per year. It'll take the iDrones several more years to catch on... Maybe. The Galaxy is the first Vanilla Android that will eat away at the other Androids. It will only get more innovative from here on out. Complain about all the lagging you want, but Android has done more in 3 years than iPhone has done in 5.

I think HTC makes great phones... I also think that HTC was the catalyst that opened the doors for the Android market. The main problem since then is that it has produced very few distinctive models. The other problem was the battery life of the first phones it released such as the EVO. Even though people liked the phone, the poor performance of that battery left a bad taste in people's mouth. So people started to look elsewhere such as Sumsung.

hey, #4, why are you bittin on my logo? There is only one DROIDX0430 with that logo in this forum. I'm like EF Hutton---when I talk--people listen--and with that bogus quad core comment you just made-- I don't want my viewers to get the wrong opinion--because I know for a fact that quad core is not even close--Maybe an idea--but not yet ready for phones yet--Believe me, NFL Mobile, USAA Mobile App, Angry Birds, Skype and Facebook--don't need quad core....And you don't need it to talk either----

HTC is far far from death...yes results are somewhat bad but thats mainly because the most recent phones were somewhat "incomplete"...I mean, Rezound would be amazing device but theyre kinda ruined it by bad battery life and design far from what mainstream wants, samsung did oposite,they copied as much as the could and started this "make phone as stupidly thin as possible" nonsense...but I must say that for many people around the world, HTC is still the best and premium manufacturer...

only thing that HTC needs is to make next line of their phones better...better battery,better feel and sadly...more mainstream design...

HTC ruined it with the HTC Thunderbolt--and they still didn't get it with the Rezound!!!! They put small mah batteries in LTE devices, and you can't see any of there phones outside in sunlight......besides the fact that every phone they make looks the same----It's like no matter what they produce--they all look like the original EVO..Beats Audio want save you!!!!

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